July 08, 2012
2: 18 am, Los Angeles, CA
Is there truly A Nigerian Entertainment Industry? – Segun Aluko[*]
I just read Chris Ihidero’s piece titled: “Do we really have an
entertainment industry in Nigeria?” published in NETng’s August 17, 2011
edition (see http://thenetng.com/2011/08/17/do-we-really-have-an-entertainment-industry-in-nigeria/)
wherein Chris painted the picture of where the Nigerian entertainment was in
the 80’s and how much it had regressed today. After reading Chris’ piece, my
quest to type up something on this issue, which I had procrastinated for too
long, got the best of me. So I got on google and I typed out “entertainment industry
in Nigeria”. List in my search result is a youtube video by abnnigeria.com of
an interview with Jimi Ogbobine, a financial analyst at BGL Capital. Jimi feels
the Nigerian entertainment industry is in fact existent but there is a need to
do move it ahead from its present state.
I remember my own quest to build a career in entertainment. I’ve had
that dream since 2000 during my senior year in high school; thanks to Danielle
Steel’s books. Reading those books made me fantasize a lot about life in Los
Angeles; a beach house in Malibu (still in the works) and closing deals in
Studio City, Burbank and bar crawling on the boulevards of Hollywood, Sunset
and Beverly Hills. I finally embarked on that journey on August 10, 2011, my 27th
birthday. I wanted to make it a memorial. Eight months thereafter on May 11,
2012, I was conferred with a LL.M (Master of Laws) and an Entertainment Law
Certificate by the University of Southern California Law School, the foremost
school in United States for entertainment and Hollywood’s power brokers in
entertainment (George Lucas went to the USC film school and the top
entertainment lawyers are alumni of the law school).
Few things occurred during my education at USC Law. My boisterous and
ambitious self was ready to network and boast about the Nigerian entertainment
industry. The music is no doubt doing super good. It’s no news that D’banj
signed a deal with GOOD music! That’s a super big deal! In fact my American
friend uploaded D’banj’s photo on facebook and tagged me. As soon as she did that,
we chatted about how D’banj is a “super entertainer” and how he’d conquered
Africa and waiting to unleash his talents in North America. She even loves Styl
Plus (I heard they just disbanded the group or about to). Well, the Nigerian
music industry is a topic for another day.
At my entertainment law class, the law professor who is a Senior Vice
President (SVP) at Paramount, a billion dollar major movie studio in Hollywood
asked us to introduce ourselves. Pronto! I spoke about my background as a lawyer
from Nigeria (I was the only black face in that class, the only black face in
the 2012 LL.M class and the only dude from Africa in the entire law school! Man
that was so boring and lonely! I envied my colleagues at NYU and Columbia!).
Then I said those heavy words. I told my class that Nigerian movie industry is
the third largest in the world and second to Hollywood in terms of volume! “We
produce over 2,500 movies a year!” I said. You needed to see how surprised my
professor was. Lol! But I was quick to point this out: “But they are low budget
movies with budgets as low as $50,000. It’s more of home video market”.
That wasn’t all. My entertainment class, like other classes I took
(specifically targeted at the entertainment business of TV, music, motion
pictures including their legal and business issues), had inputs from practising
attorneys who came to discuss the current issues in the industry. Another SVP
at Paramount, who heads the studio’s antipiracy group, came to talk to us about
cyberlockers and other pirate activities Paramount was dealing with. Top on the
list was getting that Megaupload guy (that guy has made a fortune from
streaming pirated copies of American movies and TV shows). As soon as the class
was over, I walked up to him and introduced myself as a lawyer in the LL.M program
from Nigeria. His face lit up immediately “Oh that’s Nollywood!”, he said with enthusiasm.
I was so excited! He has some Nigerian friends and have watched some of our movies
“which were laughable because of the production quality”, he noted. But we both
agreed that although there is specific structure yet, Nigerian entertainment has
a huge potential. “You are making the right move bro”, he tried to encourage
me.
While many Nigerians both at home and in diaspora might be happy to
take a shine when approached about Nollywood as the biggest or perhaps best
thing coming out of Africa, I beg to say that we aren’t there yet. But we’re
sure trying! Before I came to Los Angeles for my studies, I thought
entertainment was just movies and music. As a matter of fact when I wrote my
Bachelor of Laws’ dissertation during my studies at Ife, I analysed how much
licensing can do in curbing piracy in the Nigerian copyright industry (with
emphasis on its entertainment industry – movies and music). When I got to
United States, my understanding changed! There is a lot to entertainment than
music and movies! It’s a big industry worth billions if not trillions of
dollars with trained lawyers, businessmen, financial analysts, actors and
actresses, musicians, songwriters, bankers, below-the-line crew and soon that
can populate a mega city. People travelled from all over the world, like I did,
to realise their dream of landing a career in entertainment. You’ll see sea of
heads on Sunset Boulevard, Hollywood, Beverly Hills, and in the studios across
Southern California looking to land that deal.
But gone are the days when the only way to be on the big screen is to
come to LA. Hollywood has opened shops in other parts of the world. It’s moved
to Asia with the major movie and animation studios setting up studios in India
and China and setting up theme parks in Japan. Dreamworks Animation, the studio
that produced “Shrek” and “Madagascar” just signed $600 million deal with a
Russian company for TV rights of all Dreamworks animated movies. Bollywood of
India has moved on too! It’s indeed the second largest movie industry in the
world. Those guys have stepped up their game and incorporated Hollywood into
their production and distribution. No wonder there is so much collaboration of
the two industries with movies like “The Marigold Hotel” and TV show like “Smash”.
In fact, foreign box office receipts for American movies double that of the
domestic box office.
Now what makes an entertainment industry? Entertainment industry is
versatile and at this time it is very difficult if not impossible to describe
with certainty. But the general definition will include movies, music, games,
TV, broadway and reality shows. You can also say that it involves talent deals,
production deals, writer deals, gross and net participation of proceeds (not
profits – a topic for another day), multi system operators (MSOs) (think about DSTV
and HITV – here you talk about Comcast, Direct TV or Time Warner Cable), distribution
deals, production financing, exhibition, adaptation and derivation issues
(prequel, sequels, and/or animations), characterisation and subsequent productions,
privacy and publicity rights, royalties and passive payments. These latter
categories of entertainment are really what make it an industry. What Nollywood
still understands and is familiar with are the first categories of
entertainment.
In order to build an industry out of entertainment, Nollywood needs to
create a structure. There is a structure in making movies. Movie making isn’t
for everyone. It’s an intellectual creation that requires intellectual and
creative minds. While these creative minds are busy putting together the movie,
the lawyers are required to structure the deal and the business people to provide
financing (also structured by the lawyers). A typical movie in Hollywood
(whether by a major studio or independent a.k.a. “indie” takes many years to
make. Within the studio, there are the creative executives (in-house producers
and people in original programming) who source for stories. Stories could
either be a life story or fiction (adaptation or fictionalization of a true
life story – that’s when you see “Based on ....” in the on screen credit scroll).
Landing a story might be directly to the studio or flowing from a production
company or agency through the “pitch” process. When that story is pitched to
the studio and the suits at the studio decide to give it a green light, then
the people in business and legal affairs (lawyers) swing to action.
Everything about entertainment, like real estate, is RIGHTS! $500
million might have been spent to produce a movie only for the studio to be
struck with a court injunction from releasing it, on the basis that a scene in
that movie infringed someone’s musical or artistic rights. That’s why it’s
called “intellectual property”. So what happens? The lawyers in business &
legal make the deals by negotiating with the talent’s agents and/or managers. They
get the writer to sign contract assigning all rights and warranting that the
story is her original work. Then, the studio names the producer of the movie. I’m
sure you’ve heard of great producers like Jerry Bruckheimer who earns over $100
million per movie. That requires a producer agreement. Working closely with the
producer who acts as the Chief Operating Officer as well as Chief Financial
Officer of the movie, the studio names the Director. That is a long process
because the director is the Chief Executive Officer of the project. He sees the
vision and creates the movie from the story by working closely with the writer
to create a teleplay out of which the movie will be made. That story might
change many times that it won’t be the original story again. And there are many
times that the writer may be fired and another one employed in order to comply
with the director’s vision because the success and failure of the movie fall on
the director. Guess what, the legal people must also put together a contract
for the Director with director’s compensation running into $200 million
depending on the clout of the director and budget of the film. I’m sure you’ve
held of Steven Spielberg and Martin Scorsese. Those are the highest earning
directors in Hollywood.
But the deals are not over yet. I’m sure you will ask what about the
actors? Yes, the actors put the director’s vision into reality and a good actor
may be able to make a bad script a good one and vice versa. Isn’t that why the
actors earn so much? If you’ve read the June 4, 2012 edition of Forbes magazine
on Celebrity 100 then you’ll know that American celebrities earn a fortune for
their on-camera talent services. That deal is another kettle of fish on its own
with deal terms ranging from top issues like condition precedents, scope of
services, compensation (guaranteed, deferments and participation in proceeds),
on screen credits (list of actors, director and producer in the movie – big deal)
and other very important issues like publicity and use of artist’s name, image
and likeness, travel and wardrobes. American actors don’t joke with their
trailer. There’s an entire clause devoted to the trailer (a movable house depending
on its nature and the level of the actor consisting of a private changing room,
bed, sofa, table, bathroom, with assistants, personal trainers and stylists).
Actors do have levels. You have the A-list actors like Will Smith and Angelina
Jolie who won’t take anything less than a single trailer. In fact they have
their private trailers which they loan to the studio who will bear the cost of
transportation no matter where in the world is the location of the shooting. Other
actors might take a double banger or triple banger or just an open space. Then
that level trickles down to other casts and crews including the extras. They
are actors too and not just someone called out on street to do “waka pass”.
Then the lawyers also do the deals for the “below-the-line” crew (known by that
name because when you look at your credit scroll, these members of crew come
after the actors, directors and producer (called “above-the-line” crew) – same also
goes for the accounting procedure for the movie. There is a line that separates
them). The below-the-line crew includes the drivers, the electricians, camera men,
electricians and other off-camera crew members (of course not including directors
and producer)
One important thing to note about the above deals is that their terms
don’t just come from the air or are based on the largesse of the studio’s
executives. They must be in compliance with the guild requirements. Now that
needs some explanation. In Hollywood (as well as in other entertainment
industries like Canada, India and UK), the directors, producers, actors as well
as the below-the-line crew have unions (just like the NLC or TUC) who negotiate
with the Motion Pictures Association of America (MPAA – the group representing
the interests of all movie studios and production companies in America). Each of
these unions have a Minimum Basic Agreement (MBA) reviewed and renegotiated
every two years which sets the minimum compensation and benefits that an actor,
director or below-the-line person (except producers since they, like the
studios, are employers of the other players in the movie making business) MUST
obtain in order to offer their services for movie production. I’ll discuss this
in future articles but to give you an overview, let’s discuss SAG deals. SAG is
the Screen Actors Guild, a group comprising all actors engaged to provide on-camera
talent services in movie production in United States. I understand they
actually have affiliates and members across the world. The other union for
actors is the American Federation of Television and Radio Artists (AFTRA) which
is a group of actors engaged in TV and/or radio productions. But now they just
merged so it’s now called SAG-AFTRA (see www.sag-aftra.org)
in order to be able to effectively negotiate good deals for their members.
So, for an actor to be engaged in a movie production, the studio or production
company must ensure compliance with the SAG Minimum Basic Agreement (MBA) which
will involve the minimum payment and work condition for the actor based on the
times she’s engaged. And this may be daily or weekly with a minimum period of
time. A producer can’t just keep an actor for five hours and only engage her to
provide on-camera services for 30 minutes and pay for just that. He must pay
the minimum which is for a day and for weekly, the minimum is also set in the
MBA. The good thing about the guild agreement is that the studio is required to
make health insurance payment, which is a percentage of the actor’s
remuneration to the guild and passive payment for use of the movie which is 6%
of the film's gross earnings. Now if such actor becomes incapacitated or suffers a
disease, she doesn’t have to be at the mercies of Nigerians to donate money for
her treatment. There are funds in her medical insurance with the union which she
can draw from.
Now for the exhibition of the movies if it gets made the legal people
will also have to put together a distribution deal for the domestic box office
(a negotiation between the MPAA and the National Association of Theatre Owners –
NATO) and the foreign box office which could either be through a gap lending
financing deal, licensing or sales agreement. Apart from this, other deals like
merchandising, prequels and sequels, licensing, use of characters in the movie
(ask if they are independent of the story or part of it – a lot of legal
implications bordering on rights), the use of music and scores in the movie (is
there going to be a Music Composition and Performance Agreement to make soundtrack
for the movie – like many Yoruba movies scoring Tope Alabi’s compositions – or
a Synchronization License deal to use an existing music? – now that’s something
that will cause serious legal issues in Nigeria in the near future).
The entertainment industry is complex and what Nigeria has now isn’t
the entire industry. It’s still a huge potential and the earlier we get it
moving by providing structure the better for the economy. Many people have
mentioned the Federal Government’s grant of $200 or $500 million for Nollywood
to be disbursed by the Bank of Industry and assessed by moviemakers as soft
loans for Nigerian movies. Will that put the structure required in place? I say
NO. As a matter of fact, this is déjà vu. This isn’t the first time the
Nigerian government is offering to support the Nigerian movie industry. I spoke
with Mr. Awosika, one of Nigeria’s moviemaker of the 80’s here in LA and member
of cast of the “Village Headmaster”. In the 80’s, Nigeria had over 1,000 movie
theatres and the need to build a Nigerian movie industry was on the government’s
top burner. Nigeria had the finest moviemakers, actors, directors and
producers. What was the aftermath? After many decades, those movie theatres are
now either church assemblies or warehouses. Growing up in Ibadan, I remember
Odeon Cinema transforming to a Pentecostal church, Queen’s cinema is now a
run-down place with small shops carved out for the fashion boutiques. The State
of California doesn’t have any equity in Hollywood apart from providing the
legal support through laws that will curb infringement, piracy and idea theft. The
United States government doesn’t have any equity there either apart from the
laws and regulatory framework like the Copyright and Antitrust Acts as well as
Copyright Office and Federal Trade Commission. We don’t need the government to
build an industry for entertainment; after all $500 million will only make a
high budget movie in Hollywood. Government, particularly Nigerian government,
has not proven to be good managers of resources.
What Nigeria entertainment needs to build the industry is for the
players to understand and appreciate their strength and weaknesses. This is not
a mechanic shop where the apprentice hopes one day to set up his own shop. An
actor needs not aim to become a moviemaker someday unless she’s really made for
it. An actor needs to be good at acting. A director needs not produce and star
in a movie unless he really has that talent; there are very few people like
that. A fish seller who has some N5 million can’t make a quality movie. We need
venture capitalists that will put together the big wigs like entertainment
lawyers, business people who understand entertainment business, investment
bankers who understand the risk of entertainment business and the profit if the
movie becomes a blockbuster. We need these stakeholders who can put the deals together
and exploit the movies. The truth is that there are audiences for Nollywood
across the world but it has a bigger obligation to be an industry that can
compete with Hollywood and Bollywood. Currently, there is no competition.
Nollywood doesn’t make movies yet; it only makes home videos and that’s no
movie!
Knowing my country people very well, I expect people to disagree,
criticize this piece and even call for my head. I can imagine many people saying
Nigeria isn’t America or India. Nollywood is fine just the way it is. Well my
answer to you is this: I won’t stay with cheese and crackers when I can heat
the beef and chicken and have myself some of the best French wines to go with
it. Nollywood does have the potential but I’m afraid to say that there isn’t
the industry yet.
[*] Segun Aluko is an entertainment lawyer. He’s
an associate at a commercial law firm in Lagos, Nigeria and a recent LL.M
(Master of Laws) and Entertainment Law Certificate graduate at the University
of Southern California, Los Angeles, California, United States
